Santeon Group Inc. Reports Third Quarter 2013 Results
RESTON, Va., Nov. 14, 2013 /PRNewswire/ -- Santeon Group Inc. (OTCBB: SANT, "Santeon" or the "Company") announced today operating results for the third quarter ended September 30, 2013.
Third Quarter Highlights
- Increased revenue 24% year-over-year to $1,481,436 for the third quarter 2013
- Grew government sector revenue 134% year-over-year to $747,771 for the third quarter 2013
- Achieved net income of $23,251, or $0.02 per diluted share, for the third quarter 2013
"During the third quarter, Santeon took meaningful steps to advance its strategic long-term growth plan and improve its financial profile. The divestiture of our eBenefits Network (eBN) business strongly positions the Company to focus exclusively on Enterprise Agility and outsourced software development services — areas we believe present the most compelling growth opportunities and best leverage the core capabilities of the Company," commented Dr. Ash Rofail, Chief Executive Officer of Santeon. "The addition of two dedicated business development executives and three new revenue-generating employees, coupled with redeployed financial resources following the eBN transaction, will allow us to expand our presence in the public and private sector to meet growing market demand."
Dr. Rofail added, "Our shift in strategy comes as we continued to execute operationally. During the quarter, we increased revenues by 24% year-over-year, maintained strong Adjusted EBITDA, secured a high profile government-sponsored enterprise customer win and further penetrated existing customer accounts, all of which helped drive momentum in our business."
Third Quarter 2013 Results
Revenue increased 23.8% over the third quarter 2012 from $1,196,711 to $1,481,436 for the third quarter 2013. Agile training, coaching and consulting revenue increased 4% to $840,837 for the third quarter 2013, compared to $809,661 for the third quarter 2012. Software development revenue increased 53% to $427,562 for the third quarter 2013, compared to $279,694 for the third quarter 2012. eBN revenue increased 98.4% to $213,037 for the third quarter 2013, compared to $107,356 for the third quarter 2012.
Adjusted EBITDA, as reconciled in the attached table, was $21,174, or 1.4% of revenue, for the third quarter 2013, compared to $185,749, or 15.5% of revenue, for the third quarter 2012.
Net income was $23,251, or $0.02 per diluted share, for the third quarter 2013, compared to net income of $150,723, or $0.13 per diluted share, for the third quarter 2012.
During the third quarter ended 2013, the Company generated $26,368 in cash from operations and reduced its debt balance by $17,454 to $106,574. As of September 30, 2013, Santeon had cash of $190,492, resulting in a net cash position of $83,918.
Conference Call
The Company will host a conference call with investors to discuss its third quarter 2013 results today at 9:00 a.m. ET. To participate, please call 1-888-562-3356 in the U.S. 1-973-582-2700 outside the U.S.) and enter pass code 93481016. The call will also be available as a live, listen-only webcast at http://www.santeon.com.
A replay of the webcast will be available online at http://www.santeon.com beginning shortly after the call. A telephone replay of the call will also be available two hours after the call until November 21, 2013, and may be accessed via telephone by dialing 1-855-859-2056 (1-404-537-3406 outside the United States) and entering pass code: 93481016.
About Santeon Group Inc.
Santeon Group Inc. is a technology company headquartered in Northern Virginia with offices in Reston, Va., Tampa, Fla., Cairo, Egypt and Pune, India. Santeon offers products and services to optimize federal and commercial enterprise performance. Santeon's goal is to serve emerging markets by providing technically superior products and solutions while reducing the cost of ownership and deployment of these solutions through a strong channel partner and distribution model. For more information please visit our web site at http://www.santeon.com.
Safe Harbor Statement
The preceding press release may include statements that include, among others, forward-looking statements about our beliefs, plans, objectives, goals, expectations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words "may", "could", "should", "would", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target", "goal" and similar expressions are intended to identify forward-looking statements. All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in the forward-looking statements. Our ability to achieve our financial objectives or improve the company's stock price could be adversely affected by many factors, including, without limitation, the following factors: The strength of the United States economy, changes in the securities markets legislative or regulatory changes, the loss of key personnel, technological changes, changes in customer habits, our ability to manage these and other risks, and our ability to deliver products and services on time. However, other factors besides those listed above could adversely affect our results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. These forward-looking statements are not guarantees of future performance, but reflect the present expectations of future events by our management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Any forward-looking statements made by us speak only as of the date they are made. For additional information about Santeon's business and financial results, refer to Santeon's Annual Report on Form 10-K that may be found at sec.gov or on http://www.santeon.com/Sec_Filings.html. Santeon undertakes no obligation to update any forward-looking statements that may be made from time to time by the company, except as may be required by applicable law, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Measures
The Company has included in this press release certain non-GAAP financial measures. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of the Company and when planning and forecasting future periods. Readers are cautioned not to view non-GAAP financial measures on a stand-alone basis or as a substitute for GAAP measures, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP measures with non-GAAP measures also included herein.
Investor Relations Contact
Jeffrey Goldberger / Rob Fink
KCSA Strategic Communications
212.896.1249 / 212.896.1206
[email protected] / [email protected]
| SANTEON GROUP INC. |
|||
| CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
| September 30, 2013 |
December 31, 2012 |
||
| ASSETS |
(Unaudited) |
||
| Current assets: |
|||
| Cash |
$ 190,492 |
$ 183,785 |
|
| Accounts receivable |
657,823 |
796,466 |
|
| Other current assets |
81,265 |
16,795 |
|
| Total current assets |
929,580 |
997,046 |
|
| Property, plant and equipment, net |
39,599 |
20,364 |
|
| Software assets, net |
199,582 |
281,212 |
|
| Other asset |
23,950 |
8,783 |
|
| Total non-current assets |
263,131 |
310,359 |
|
| Total Assets |
$ 1,192,711 |
$ 1,307,405 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|||
| Current liabilities: |
|||
| Accounts payable and accrued expenses |
$ 718,028 |
$ 1,107,345 |
|
| Notes payable - current portion |
76,649 |
120,509 |
|
| Total current liabilities |
794,677 |
1,227,854 |
|
| Long term liabilities: |
|||
| Deferred rent |
58,078 |
- |
|
| Notes payable |
29,925 |
83,166 |
|
| Total long term liabilities |
88,003 |
83,166 |
|
| Stockholders' equity (deficit): |
|||
| Preferred stock, par value $0.001, 50,000,000 shares authorized: 0 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively |
- |
- |
|
| Common stock, par value $0.001, 50,000,000 shares authorized; 1,240,861 and 1,184,899 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively |
1,241 |
1,185 |
|
| Common stock to be issued |
52,500 |
10,000 |
|
| Additional paid in capital |
1,682,717 |
1,518,726 |
|
| Treasury Stock, at cost, 0 and 16,238 shares as of September 30, 2013 and December 31, 2012, respectively |
- |
(38,925) |
|
| Accumulated deficit |
(1,426,427) |
(1,494,601) |
|
| Total stockholders' equity (deficit) |
310,031 |
(3,615) |
|
| Total Liabilities and Stockholders' Equity (Deficit) |
$ 1,192,711 |
$ 1,307,405 |
|
| SANTEON GROUP INC. |
|||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
| FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 |
|||||||
| (Unaudited) |
|||||||
| Three Months Ended |
Nine Months Ended |
||||||
| September 30, 2013 |
September 30, 2012 |
September 30, 2013 |
September 30, 2012 |
||||
| Revenues |
$ 1,481,436 |
$ 1,196,711 |
$ 4,042,117 |
$ 2,897,904 |
|||
| Cost of revenue |
785,948 |
588,741 |
2,043,506 |
1,608,833 |
|||
| Gross Profit |
695,488 |
607,970 |
1,998,611 |
1,289,071 |
|||
| Operating expenses: |
|||||||
| General, selling and administration |
724,570 |
456,478 |
2,027,725 |
1,276,315 |
|||
| Depreciation and amortization |
4,413 |
1,460 |
8,098 |
4,273 |
|||
| Total operating expenses |
728,983 |
457,938 |
2,035,823 |
1,280,588 |
|||
| (Loss) income from operations |
(33,495) |
150,032 |
(37,212) |
8,483 |
|||
| Other Income (Expenses): |
|||||||
| Interest expense |
(792) |
(1,556) |
(8,224) |
(9,908) |
|||
| Gain on cancellation of debt/equity |
7,500 |
- |
40,523 |
- |
|||
| Gain on forgiveness/settlement of debt |
54,190 |
407 |
61,956 |
75,697 |
|||
| (Loss)/gain from foreign currency transactions |
(4,152) |
1,840 |
11,187 |
2,386 |
|||
| Loss on disposal of asset |
- |
- |
(56) |
- |
|||
| Total other income, net |
56,746 |
691 |
105,386 |
68,175 |
|||
| Income before provision for income taxes |
23,251 |
150,723 |
68,174 |
76,658 |
|||
| Provision for income tax expense (benefit) |
- |
- |
- |
- |
|||
| Net income |
$ 23,251 |
$ 150,723 |
$ 68,174 |
$ 76,658 |
|||
| Net income per common share, basic |
$ 0.02 |
$ 0.13 |
$ 0.06 |
$ 0.06 |
|||
| Net income per common share, diluted |
$ 0.02 |
$ 0.13 |
$ 0.06 |
$ 0.06 |
|||
| Weighted average number of common shares |
1,254,883 |
1,192,734 |
1,215,366 |
1,198,825 |
|||
| Weighted average number of common shares |
1,254,883 |
1,192,734 |
1,215,366 |
1,198,825 |
|||
| SANTEON GROUP INC. |
||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||
| FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 |
||
| (Unaudited) |
||
| September 30, 2013 |
September 30, 2012 |
|
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||
| Net income |
$ 68,174 |
$ 76,658 |
| Adjustments to reconcile net income to net cash provided by |
||
| Depreciation and amortization |
112,604 |
101,524 |
| Loss on disposal of asset |
56 |
- |
| Gain on cancellation of debt |
(40,523) |
- |
| Gain on forgiveness/settlement of debt |
(61,956) |
(75,697) |
| Common stock issued or to be issued for compensation |
35,625 |
22,500 |
| Stock-based compensation expense - common stock options |
66,665 |
- |
| Common stock issued for accrued interest |
1,750 |
- |
| Changes in operating assets and liabilities: |
||
| Accounts receivable |
138,643 |
(78,714) |
| Other current assets |
(5,095) |
(4,112) |
| Other asset |
(15,167) |
- |
| Accounts payable and accrued expenses |
(190,983) |
174,514 |
| Net cash provided by operating activities |
109,793 |
216,673 |
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||
| Capitalized software assets |
(22,877) |
- |
| Purchases of property, plant and equipment |
(28,388) |
(4,851) |
| Proceeds from sale of fixed assets |
1,000 |
- |
| Net cash used in investing activities |
(50,265) |
(4,851) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||
| Payments for treasury stock |
(720) |
(17,500) |
| Repayments of notes payable-related party |
- |
(57,033) |
| Repayments of notes payable |
(52,101) |
(34,131) |
| Net cash used in financing activities |
(52,821) |
(108,664) |
| Net increase in cash |
6,707 |
103,158 |
| Cash, beginning of the period |
183,785 |
16,960 |
| Cash, end of the period |
$ 190,492 |
$ 120,118 |
| Supplemental disclosures of cash flow information: |
||
| Income tax paid |
$ - |
$ - |
| Interest paid |
$ 2,298 |
$ 2,513 |
| Supplemental disclosures for non-cash investing and financing |
||
| Common stock issued for settlement of debt and accrued interest |
$ 50,000 |
$ - |
| Common stock issued for settlement of accrued bonus |
$ 40,277 |
$ - |
| Common stock issued for prepayment of services to be rendered |
$ 59,375 |
$ - |
| SANTEON GROUP INC. |
||||||||
| RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA |
||||||||
| FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012 |
||||||||
| (Unaudited) |
||||||||
| Three months ended |
Nine months ended |
|||||||
| September 30, 2013 |
September 30, 2012 |
September 30, 2013 |
September 30, 2012 |
|||||
| Net (loss) income |
$ 23,251 |
$ 150,723 |
$ 68,174 |
$ 76,658 |
||||
| Loss on disposal of assets |
- |
- |
(56) |
- |
||||
| Gain on forgiveness / settlement of debt |
(54,190) |
407 |
61,956 |
75,697 |
||||
| Gain on cancellation of debt |
(7,500) |
- |
40,523 |
- |
||||
| Interest expense, net |
792 |
(1,556) |
(8,224) |
(9,908) |
||||
| Depreciation and amortization |
40,011 |
33,877 |
112,604 |
101,524 |
||||
| Non-cash stock option compensation expense |
18,810 |
- |
66,665 |
- |
||||
| Termination expense |
- |
- |
46,311 |
- |
||||
| Adjusted EBITDA |
$ 21,174 |
$ 183,451 |
$ 387,954 |
$ 243,971 |
||||
SOURCE Santeon Group, Inc.
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